Marvin’s Best Weekly Reads Oct 9th, 2022
"Success is not final, failure is not fatal: it is the courage to continue that counts."--Winston Churchill
Words of wisdom to prepare for the upcoming next few quarters of pain.
"In Short, to keep it simple. Assume that you will be down 10% or so in total after tax income. This will help you reset your budget mentally for the next 12 months. Q4 and Q1 will not be good. So. Don’t tell people you’re doing well if you survive the cuts."
"....focus on the big one-time costs and avoid penny pinching items that you need to improve your financial position over the next 5-10 years. If you fall behind on important things like software/AI you’re dead in the water when it comes to your business anyway."
Self Care: The biggest “zag” is to take care of your health. During downturns people gain weight, develop health issues and generally let stress decide their mood on a day to day basis. This isn’t healthy. Use that free time to calmly think, plan and prioritize for the future. It won’t be “down only forever”. It will be down only until everyone agrees that it’s a terrible economy. At that point, we’re at/near bottom."
https://bowtiedbull.substack.com/p/set-reasonable-expectations-during
2. "There are a few principles that if strictly adhered to will contribute the most to your sales success:
-Always Control the Frame
-Always be High Status
-Focus on their PROBLEMS not your solutions
-Always quantify their business problems
-Always find out their personal motivations
The closer you follow and implement these 5 principles, the better off you will be."
https://bowtiedsalesguy.substack.com/p/what-moves-the-needle
3. A very solid discussion on various businesses today: Sanrio & the richest man in India! "Not Investing Advice."
https://www.youtube.com/watch?v=2g0cu9QTpIU
4. Net net the Russian barbarian army is toast.
https://www.youtube.com/watch?v=dqVjUOvp_04
5. This looks really good! Yellowstone season 5.
https://www.youtube.com/watch?v=XkQmKIKt1zk
6. "So, now is not the time to prepare for a Ukrainian Victory. It is time to prepare for a world where the superpowers are all experiencing de-centralization and re-localization of politics and geopolitics.
This is all short-term extremely alarming and long-term probably seriously positive for the world economy. We may now be on the brink of a wave of economic and political forces that can generate much more economic growth, much more innovation, and much more disinflation if not deflation. When the Soviet Union supposedly fell, billions of new workers came into the world economy and pushed down wages and prices. This is about to happen again but on a larger scale and with better connectivity and technologies to support it this time.
When China entered the world economy after Deng Xiaoping gave the Chinese permission to be capitalists, China and its neighbors also lifted the performance of the world economy while killing off inflationary pressures. A repeat of this labor/innovation event is exactly what the world economy needs. Bill Ackman is right when he says immigration into the US would help reduce inflation. Worker immigration into the world economy will reduce it globally. If the superpowers are diminishing and devolving, then we’ll get a new peace dividend."
https://drpippa.substack.com/p/the-ukraine-effect-relocalization
7. "As I pointed out in my most recent essay “For the War”, the recent past was one of economic peace between the two major blocs (US / EU vs. Eurasia / Russia / China). But using its Western European vassals, the US political elite is determined to stymie the economic integration of the Eurasian landmass. The Russians did them a favour by invading Ukraine and not winning quickly.
Now, the political elite can use the kinetic war in Ukraine as the casus belli for intensifying the economic war that was always going to happen between a descendant Pax America and an ascendant China and her vassals. In case you missed it, at the recent Shanghai Cooperation Organization jamboree in Samarkand Uzbekistan Putin gave the Chinese everything they wanted in return for Xi not diplomatically abandoning Russia. We drankin’ Maotai, not Stolichnaya.
The war is raging in cold places like cyberspace. You can’t use Instagram in China, and if some US politicians get their way, you wouldn’t be able to use TikTok in America. If your passport is Russian, your Dollars, Euros, Pounds, etc. aren’t yours anymore. And Russia now only allows purchases of hydrocarbons in RUB, Gold, or currencies of “friendly” nations.
The global financial and energy system is balkanising and it will lead to intense pockets of inflation. In this scenario, a global currency operated and owned by and for humanity has infinite value. This is when the Bitcoin technology will show its true worth and buttress the right-hand side of the value proposition laid out above."
https://medium.com/entrepreneur-s-handbook/snippets-6eebdee2b069
8. This was a great episode: All in Podcast.
https://www.youtube.com/watch?v=fU6QlvruLTw&t=2782s
9. "The current situation, however, is peculiar. In some areas, such as microchips, integration is disappearing. In others it is still flourishing. Chinese exports to the United States stand at record levels. American investment banks are rushing into China. Cultural exchanges remain strong. The two economies remain highly dependent in each other and no one can see how they could safely be broken apart. Europeans actually complain that American energy companies prefer to export energy to China.
One can only make sense of the paradox by drawing a distinction between two levels of action: the geopolitical and the economic. At the geopolitical level, actors try to concentrate power and will build all kinds of barriers preventing their own leverage from flowing elsewhere. Advanced chips, for example: since they are a source of geopolitical power, the priority becomes to prevent your geopolitical rivals from having access to them. In certain circumstances, energy might also rise to the geopolitical level."
https://brunomacaes.substack.com/p/some-further-notes-on-decoupling
10. "The more Ukrainian forces can move forward the more Russian assets are in artillery range. Ukrainian units are reported to be pressing Kreminna and may soon threaten the Russian positions in Lysychansk and Severodonetsk, taken in June after a long and costly (for both sides) struggle. There are also reports of a new push by Ukrainian forces in Kherson.
All this mocks Putin’s announcement, demonstrating that he can’t hold what he has just annexed. The qustion now is how long the Russian people and, most importantly, the members of the power elite, put up with this recklessness. Polling suggests that support for the war has fallen sharply."
https://samf.substack.com/p/putins-annexation-and-lymans-encirclement
11. "Renowned as the “ideal modern banking executive,” he had reshaped the very idea of American banking as head of National City Bank and helped fuel the 1920s bull market, which was now in jeopardy.
Inside the House of Morgan, Mitchell and bankers J.P. Morgan Jr., Thomas Lamont, and Albert Wiggin decided to go on a stock-buying spree to inject confidence into investors. The momentum spread at the exchange and, miraculously, the market stabilized.
Mitchell believed the worst had passed.
“I still see nothing to worry about,” he told reporters.
But that day was Black Thursday, and the next week brought Black Monday and Black Tuesday, the defining days of the 1929 stock crash, an event that signaled the beginning of the Great Depression.
A few weeks later, when the smoke cleared enough to assess the damage, several leaders pointed at Mitchell once again. This time, his status as the ideal banker meant he represented something far grimmer.
Senator Carter Glass said later, “He, more than any 50 men, is responsible for this stock crash.”
https://thehustle.co/the-banker-who-caused-the-1929-stock-crash
12. Another great discussion with Peter Zeihan. Worth watching this if you want a good view on geopolitics.
https://www.youtube.com/watch?v=kPa1NvmER84
13. "I still think this ends badly for Putin - shot to the head from some Russian patriot in his entourage. There is opposition within the Kremlin - people like Patrushchev, former "rival" Sergei Ivanov, there is a cadre of more sophisticated career siloviki who I think could move against him as this gets worse for Russia and the Russian military losses mount. I think there are plenty of people who don't want to get into a nuclear war with NATO. I think the US is talking to these people, surely it is?
I still think here that we are approaching the end game in Ukraine, and for Putin. He has lost the war in Ukraine, there is no winning strategy there for him now - only question now is is if Putin loses Russia, the rest of the near abroad, remaining allies like China, his own life, as well as Ukraine.
End game for Putin. Hopefully not for us all as well."
https://timothyash.substack.com/p/putin-boots
14. This is a good framework for startup valuations.
https://alexoppenheimer.substack.com/p/directional-valuation
15. "The global travel industry have lead us to believe that there are only two travel modes: business or pleasure. But I believe that there is a third: living on our own terms. This means to travel with integrity while being opened to new experiences and learnings."
https://fewerbetterthings.substack.com/p/on-conscious-hybrid-traveling
16. "It’s hardly a secret that this country is a HUGE potential market. Nigeria is a country of nearly 220 million people. Just under 1 in 7 Africans, and 3 in 100 people in the world live in Nigeria. The commercial capital Lagos alone, where domestic migrants flock seeking opportunity, has a population of around 17 million.
The population is also young. The median age in Nigeria is just 18.6. That compares to 38.5 in the United States, 38.4 in China, and 28.7 in India.
As a result, like most of Africa, between now and mid-century, Nigeria is going to see a huge spurt in the growth of its productive, working-age population."
https://globalvaluehunter.com/nigeria-may-just-be-the-cheapest-stock-market-on-the-planet
17. "As in an eighties horror flick, America’s political divide started benign, campy even, and has become gruesome quickly. However, it’s not a demon in a hockey mask that terrorizes us. The threat is not an outside malevolent force. In fact, the call is coming from inside the house. We need programs and investments that reinforce a basic truth: Americans’ strongest allies will always be other Americans."
https://www.profgalloway.com/house-of-cards
18. "As a generalist, your value proposition to potential collaborators is often a bit murky. Since you aren’t an engineer or a salesperson, people naturally want to know how you will make their lives easier. Expert generalists are able to answer that question quickly by adding what I call “Day-One Value.”
Day-One Value means that you quickly provide enough value so that your collaborators experience “the magic moment of working with you.”
https://junglegym.substack.com/p/becoming-an-expert-generalist
19. "The quantity of people that will do favors for you, and the magnitude of those favors, dictate wealth. That is the currency. Indentured servants, in everything but name."
https://variances.substack.com/p/fake-life-true-wealth
20. "I've listed a few here that I have seen consistently across gravity-defying companies. They almost always have incredible products solving meaningful problems in a market that is unstoppable. But there are others. My key takeaway from looking back on Figma as an example wasn't to say, "here are the reasons I nailed it." It's to appreciate that the very best companies have exceptional characteristics that you have to look for.
And no, I don't believe that these kinds of exceptional outcomes are the simple result of massive waves of free money from the Fed, or whatever hand-wavey macro justification you want to try and slap on it. Every business is operating in the same economic environment. And yet, some still become exceptional."
https://investing1012dot0.substack.com/p/the-reality-of-unrealistic-outliers
21. "It will be interesting to see what the weakest sovereign borrowers turn to as a store of value over time. Western countries may have the luxury to boot up the money printer in times of economic uncertainty, but it’s developing countries that ultimately foot the bill. In our view, bitcoin provides these countries with an option to exit, or at least, reset."
https://soonaorlater.medium.com/inflationary-vs-deflationary-shocks-5f64bd4e94bb
22. Slava Ukraini!
"Thus, the ISW said, this mobilization would not affect the war's course in 2022 and "may not have a very dramatic impact on Russia's ability to sustain its current level of effort into 2023."
"The problems undermining Putin's effort to mobilize his people to fight, finally, are so deep and fundamental that he cannot likely fix them in the coming months—and possibly for years. Putin is likely coming up against the hard limits of Russia's ability to fight a large-scale war."
23. "There are a lot of hidden “traps” that founders can fall into when fundraising. There are phrases that come across differently to founders and VCs, missteps that can lose you credibility with potential investors and phrases that immediately tell an American VC that you’re “not from around these parts.”
And then, there are the things that make investors go “hmmm…”.
These are things that won’t outright kill a fundraise, but can cause enough potential investors to pause that they can meaningfully hurt your fundraising funnel. They can cause VCs to turn down introductions they might otherwise have taken, to slow down their diligence process, or to archive your intro email intending to revisit it…but never doing so."
https://chrisneumann.com/blog/things-that-make-you-go-hmmmm
24. "The half-decade since has revealed both the audacity and naivete of Son’s strategy. Debacles with WeWork, Uber, Oyo, Zume, and many others have left Softbank and its investors bloodied. In August of this year, Softbank announced a quarterly loss of $23 billion, the steepest drop in its history. That followed on the tail of a $17 billion decline the quarter before; in six months, $40 billion in value had evaporated. This week, news leaked that Softbank intended to cut 30% of its Vision Fund team.
History suggests that losses of this magnitude are often fatal. And yet, in Masayoshi Son, Softbank has someone with a rare gift for raging against the dying of the light. Time and again, he has shown an ability to recover from seemingly irredeemable circumstances. Though few would be foolish enough to bet against Son, saving his company’s venture practice looks like a bridge too far.
How Softbank found itself in such dire circumstances is a story that traces the arc of every great empire. It is a tale of grand ambition and outrageous wealth, kingdoms and kingmakers, conniving aides and flattering courtiers, dazzling conquests and humiliating retreats."
https://www.readthegeneralist.com/briefing/softbank
25. This was a fun interview & discussion on international business expansion.
https://www.globalclassbook.com/podcast/episode22-marvinliao
26. Christian Bale is an incredible actor.
"Bale resists self-reflection, but it’s not hard to see that kid in him still: drawn to extremes, transfixed by reinvention, motivated by fixing what happened to his family, and ambivalent about what he had to do and what he had to sacrifice in order to take care of the people he loved.
It’s also worth saying that he resists self-reflection in an absolutely delightful way. His accent is nominally Welsh, the voice more musical and mischievous than it tends to be onscreen, and in that voice he will ask you if you have children. He will ask you what your hopes and dreams are in life. He will seek out other things you’ve written and ask you detailed questions about them, all in the hopes of not talking about himself.
Part of it, he says, is that he thinks that if people actually know him it will ruin whatever he’s trying to do as an actor; part of it, I think, is that he’s just genuinely not all that interested in the subject. What he wants, what he’s seeking, is obsession, or oblivion—the total erasure of the self. And let me say!…I recommend talking with people who are into oblivion. They are never once boring.
He certainly was never boring. And he certainly always taught me that being boring is a sin. And so maybe it did have some connection in there, you know? But I’ve always gravitated towards, you know, the fantastic dream that someone like Werner Herzog has, and how they go through it and the way they approach it and you just dig in. That reminds me of my father a great deal. Unorthodox thinkers who are going to go do it even if everyone is screaming that they’re absolutely crazy."
https://www.gq.com/story/christian-bale-november-cover-interview
27. Love the thesis of Sturgeon Capital. Very smart strategy and VC fund.
"While frenzied activity churns some waters, Sturgeon Capital backs adventurers headed in a different direction. The $275 million investment firm has succeeded by focusing on geographies most VCs overlook, including Uzbekistan, Bangladesh, Pakistan, and Egypt. Though these countries have several attractive traits and a combined population of more than 500 million, they receive some of the lowest venture funding per capita.
Pakistan, for example, receives $1.60 per person in venture funding compared to $30 in neighboring India or $34 in Indonesia. These are exciting, emerging economies, and yet competition is minimal. While executing in developing countries brings challenges, the last decades have seen unicorns emerge from many nations with similar issues."
https://www.readthegeneralist.com/briefing/sturgeon-capital
28. "Mobilization itself starts to look like a spear pointed the wrong way: is there a point in sending thousands of unprepared and underequipped men into what they increasingly know is doom? Putin's presupposition, of course, is that mobilized soldiers will either die or win; but if they flee instead, they become a dangerous group, perhaps ready for another leader.
And so we can see a plausible scenario for how this war ends. War is a form of politics, and the Russian regime is altered by defeat. As Ukraine continues to win battles, one reversal is accompanied by another: the televisual yields to the real, and the Ukrainian campaign yields to a struggle for power in Russia. In such a struggle, it makes no sense to have armed allies far away in Ukraine who might be more usefully deployed in Russia: not necessarily in an armed conflict, although this cannot be ruled out entirely, but to deter others and protect oneself.
For all of the actors concerned, it might be bad to lose in Ukraine, but it is worse to lose in Russia.
The logic of the situation favors he who realizes this most quickly, and is able to control and redeploy. Once the cascade begins, it quickly makes no sense for anyone to have any Russian forces in Ukraine at all.
Again, from this it does not necessarily follow that there will be armed clashes in Russia: it is just that, as the instability created by the war in Ukraine comes home, Russian leaders who wish to gain from that instability, or protect themselves from it, will want their power centers close to Moscow. And this, of course, would be a very good thing, for Ukraine and for the world."
https://snyder.substack.com/p/how-does-the-russo-ukrainian-war
29. Neat story.
https://simonsarris.substack.com/p/the-king-and-the-hermit
30. Couple more weeks until I am back in JAPAN!
Some food and grocery recommendations.
https://masakijinzaburo.substack.com/p/food-and-groceries-in-japan